You are joining Apollo Inc after a good year in 2020. Sales were up and are expected to continue to grow in 2021. The most recent financ Net sales Variable Costs Contribution Margin Fixed Costs Operating income (EBIT) Interest expense Earnings before taxes (EBT) Income tax expense Earnings after taxes (EAT) Dividends Paid Addition to Retained Earnings Apollo Inc Income Statement Year Ended December 31 2020 1,575,000 1,181,250 393,750 119,700 274,050 56,280 217,770 65,331 152,439 105,798 46,641 2019 1,764,000 1,323,000 441,000 196,350 244,650 56,280 188,370 56,511 131,859
You are joining Apollo inc after a good year in 2020. Sales were up and are expected to continue to grow in 2021 . The most recent finan Apollo Inc Statement of Financial Position Year Ended December 31 \begin{tabular}{|l|r|r|} \hline & \multicolumn{3}{|c|}{} & \multicolumn{1}{|c|}{2019} \\ \hline \multicolumn{1}{|c|}{ Assets } & 2020 & \\ \hline Current Assets & & \\ \hline Cash & 26,721 & 60,580 \\ \hline Accounts Receivable & 105,000 & 150,000 \\ \hline Merchandise Inventory & 90,000 & 112,000 \\ \hline Total Current Assets & 221,721 & 322,580 \\ \hline Capital Assets & & \\ \hline Property, Plant and Equipment & 1,400,000 & 1,430,000 \\ \hline Accumulated Depreciation & 320,000 & 1495,000) \\ \hline Property, Plant and Equiment (net) & 1,080,000 & 935,000 \\ \hline Intangible Assets & 60,000 & 60,000 \\ \hline Total Assets & 1,361,721 & 1,317,580 \\ \hline \end{tabular} Liabilities \& Shareholder's Equity \begin{tabular}{|l|r|r|} \hline Current Liabilities & \\ \hline Accounts Payable & 72,500 & 80,000 \\ \hline Accrued Liabilities & 20,000 & 15,000 \\ \hline Bank Loan & 20,000 \\ \hline Total Current Liabilities & 92,500 & 115,000 \\ \hline Long-term Liabilities & & \\ \hline Mortage Payable & 670,000 & 650,000 \\ \hline Total Liaibilities & 762,500 & 765,000 \\ \hline Shareholder's Equity & & \\ \hline Common Shares (10,000 issued) & 100,000 & 100,000 \\ \hline Retained Earnings & 499,221 & 452,580 \\ \hline Total Shareholder's Equity & 599,221 & 552,580 \\ \hline Total Liab \& Shareholder's Equity & 1,361,721 & 1,317,580 \\ \hline \end{tabular} The conpacy b a ittie concemed about the impoct their rate of growth may hove on the financial stabilay of the company, Your tryt task is to look at any pocensial funding issues using the Required New Funding formil: same proportion as sales foc next year. The owners are interested to know if they will need bank financing next year to accommodate the increase in sales. They have alked you to use the ANF formulo to calculate how much, if any, they will beed to borrow from the bank. Any fundr netded would come from the bankloan, any surplus funds would be used to reduce the bank loan. Use the space below to calculase Required New Funding. Solution Use the table below to calculate Required New funding You are joining Apollo inc after a good year in 2020. Sales were up and are expected to continue to grow in 2021 . The most recent finan Apollo Inc Statement of Financial Position Year Ended December 31 \begin{tabular}{|l|r|r|} \hline & \multicolumn{3}{|c|}{} & \multicolumn{1}{|c|}{2019} \\ \hline \multicolumn{1}{|c|}{ Assets } & 2020 & \\ \hline Current Assets & & \\ \hline Cash & 26,721 & 60,580 \\ \hline Accounts Receivable & 105,000 & 150,000 \\ \hline Merchandise Inventory & 90,000 & 112,000 \\ \hline Total Current Assets & 221,721 & 322,580 \\ \hline Capital Assets & & \\ \hline Property, Plant and Equipment & 1,400,000 & 1,430,000 \\ \hline Accumulated Depreciation & 320,000 & 1495,000) \\ \hline Property, Plant and Equiment (net) & 1,080,000 & 935,000 \\ \hline Intangible Assets & 60,000 & 60,000 \\ \hline Total Assets & 1,361,721 & 1,317,580 \\ \hline \end{tabular} Liabilities \& Shareholder's Equity \begin{tabular}{|l|r|r|} \hline Current Liabilities & \\ \hline Accounts Payable & 72,500 & 80,000 \\ \hline Accrued Liabilities & 20,000 & 15,000 \\ \hline Bank Loan & 20,000 \\ \hline Total Current Liabilities & 92,500 & 115,000 \\ \hline Long-term Liabilities & & \\ \hline Mortage Payable & 670,000 & 650,000 \\ \hline Total Liaibilities & 762,500 & 765,000 \\ \hline Shareholder's Equity & & \\ \hline Common Shares (10,000 issued) & 100,000 & 100,000 \\ \hline Retained Earnings & 499,221 & 452,580 \\ \hline Total Shareholder's Equity & 599,221 & 552,580 \\ \hline Total Liab \& Shareholder's Equity & 1,361,721 & 1,317,580 \\ \hline \end{tabular} The conpacy b a ittie concemed about the impoct their rate of growth may hove on the financial stabilay of the company, Your tryt task is to look at any pocensial funding issues using the Required New Funding formil: same proportion as sales foc next year. The owners are interested to know if they will need bank financing next year to accommodate the increase in sales. They have alked you to use the ANF formulo to calculate how much, if any, they will beed to borrow from the bank. Any fundr netded would come from the bankloan, any surplus funds would be used to reduce the bank loan. Use the space below to calculase Required New Funding. Solution Use the table below to calculate Required New funding
